NVIDIA Corporation (NVDA)
Financial leverage ratio
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | Oct 27, 2019 | Jul 28, 2019 | Apr 28, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 65,728,000 | 54,148,000 | 49,555,000 | 44,460,000 | 41,182,000 | 40,488,000 | 43,476,000 | 45,212,000 | 44,187,000 | 40,632,000 | 38,650,000 | 30,796,000 | 28,791,000 | 26,881,000 | 25,180,000 | 23,254,000 | 17,315,000 | 15,810,000 | 14,775,000 | 14,021,000 |
| Total stockholders’ equity | US$ in thousands | 42,978,000 | 33,265,000 | 27,501,000 | 24,520,000 | 22,101,000 | 21,349,000 | 23,851,000 | 26,320,000 | 26,612,000 | 23,798,000 | 21,147,000 | 18,774,000 | 16,893,000 | 15,334,000 | 13,914,000 | 13,099,000 | 12,204,000 | 11,214,000 | 10,336,000 | 9,704,000 |
| Financial leverage ratio | 1.53 | 1.63 | 1.80 | 1.81 | 1.86 | 1.90 | 1.82 | 1.72 | 1.66 | 1.71 | 1.83 | 1.64 | 1.70 | 1.75 | 1.81 | 1.78 | 1.42 | 1.41 | 1.43 | 1.44 |
January 28, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $65,728,000K ÷ $42,978,000K
= 1.53
The financial leverage ratio measures the level of a company's debt relative to its equity. A higher financial leverage ratio indicates that a company is using more debt to finance its operations, which can potentially lead to higher risks but also higher returns if managed effectively.
Analyzing NVIDIA Corp's financial leverage ratio over the past eight quarters, we observe a downward trend from 1.86 in Q4 2023 to 1.53 in Q4 2024. The decreasing trend suggests that the company has been relying less on debt to fund its operations and investments, which can be viewed positively as it may lead to lower financial risk exposure.
NVIDIA's financial leverage ratio fluctuated within a range of 1.53 to 1.90 during this period, indicating some variability in the company's capital structure. It is worth noting that a financial leverage ratio of around 1.5-2.0 is generally considered to be within a reasonable range for most companies, balancing the benefits of debt financing with the associated risks.
Overall, based on the trend of decreasing financial leverage ratio and the fluctuation within a reasonable range, NVIDIA Corp appears to be managing its debt levels effectively and maintaining a balanced capital structure over the analyzed period. However, it is essential for investors and stakeholders to continue monitoring the company's leverage ratio along with other financial metrics to assess its financial health and risk profile.
Peer comparison
Jan 28, 2024